Tourism to Iceland has exploded over the last decade, creating a decidedly different travel environment than visitors will find in other parts of Europe.
Last week, we reported that Iceland is one of the most expensive places in Europe for travelers. There are ways to cut costs, but the question remains: why is it more difficult to visit Iceland as a budget traveler or backpacker?
Here’s one possible, partial explanation: Large-scale tourism in Iceland is still a relatively new thing.
The Icelandic Tourism Board breaks down the numbers each year, and they point to a huge spike over the last decade and a half:
In 2014, nearly a million people visited Iceland, which represents a 23.6% jump from the previous year. It’s also nearly a 300% increase since 2000. The growth continued in 2015, Iceland Monitor reports, with 1.2 million people visiting for a 30% increase over 2014. That means that by this year, there could be a million more visitors arriving in Iceland each year than there were in the early 2000s. That’s incredible.
In absolute terms, Iceland’s numbers are still pretty small — France and the U.K. both had tens of millions more visitors — but the increase is what’s important here. In the most basic sense, when demand suddenly spikes things get more expensive.
It also takes time for supply to catch up.
In other parts of Europe, decades of intense tourism have helped spur massive infrastructure to deal with visitors. Every continental European city is filled with everything from five star hotels to grimy budget hostels, for example. And they’re connected to vast rail networks.
That means you can show up in Paris or London as a backpacker, with no pre-planning, and still get good deals. Or you can live like a king, it’s up to you.
In Iceland, however, there’s nothing close to that scale. To get around, you have to either join a tour or rent a car — options that in other countries would be part of a much more diverse transportation menu. We even had trouble finding guide books that offered comparable quality information to what we’ve used in the rest of Europe.
This isn’t a knock against Iceland. Quite the contrary; a big part of Iceland’s appeal for travelers is that it’s small, wild, and still relatively overlooked by many tourists.
Still, it’s worth considering that the experience of traveling in most of Europe is the result of generations of supply and demand. When it comes to Iceland, however, we’re living in the first generation of massive demand growth, which means supply is still catching up.
— Jim Dalrymple II